Novell's appointment of a top Sun executive as its new chief has prompted intense speculation that Sun is poised to buy the struggling company.
The selection of Sun's chief technology officer, Eric Schmidt, as Novell chief executive officer certainly seems to herald a closer relationship between the two firms. Schmidt?s appointment, unusually, was announced in a joint statement by Novell and Sun, clearly intended to show the move was made amicably.
Because senior, respected staff like Schmidt rarely leave one technology company for another on a friendly basis, sources suggest there is more to the deal than a simple transfer. Schmidt's role will be to spearhead closer collaboration between the two parties, they say, or even a takeover bid that would make Novell into Sun?s software arm. This would enable Sun to fight off Microsoft more effectively.
Sun CEO Scott McNealy said he was grateful for Schmidt?s contributions to Sun?s success. "He is an awesome technologist, committed to network computing. We wish him every success in his new position," he said. Schmidt is a Sun veteran of almost 14 years and one of the pioneers of Java and the Internet, the cornerstones of Sun's anti-Microsoft strategy.
Jennifer Graham, communications manager at Sun, would not confirm or deny rumours that Sun is in discussions with Novell over a merger. "That would be a rumour and therefore we would not comment on it," she said. Sun and Novell already work together closely over Java and are supporting partners in The Java World Tour event, currently promoting the language in various regions, and Graham admitted the companies may be "working together in a few areas".
Danielle Epstein, a Novell representative, admitted that Sun is one of Novell?s closest partners but would not comment on the question of a takeover or merger. Schmidt is expected to offer some clues about his plans when he speaks at Novell?s Brainshare conference next week before taking up his role as CEO on 7 April.
On that date, current chairman John Young will become vice chairman and analysts predict Schmidt, Young and Joe Marengi, Novell?s president and chief operating officer, must learn to work together quickly to avoid dragging the troubled company in different directions. The team has replaced former chairman and CEO Bob Frankenberg, who stepped down last August.
Analysts said Schmidt is a technologist rather than a businessman, who has little experience with the indir"The weakest place inside Novell is the channel," one said. "The channel is being grabbed off it by Microsoft." Another said Novell has strength in its large base of resellers that service Netware networks, despite the unstoppable march of NT into the market.
Schmidt said the opportunity to lead Novell was exciting. "I will miss deeply all of the wonderful people at Sun from whom I have learned a great deal, and to whom I owe a great debt," he said.
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